In This Issue

Final Stark Rule Changes Adopt New Exceptions For Hospitals and Significant Clarifications: This article will summarize the changes to the Stark law in the final rule and delineate some of CMS’s changes from the proposed rule. Most should be welcomed as lessening the risk for North Carolina hospitals and physicians of committing minor, technical violations of the Stark law.

CMS Initiatives Target Quality & Care Improvement: Like it or not, the Centers for Medicare & Medicaid Services (CMS) is showing a strong commitment to moving forward with its focus on hospitals’ quality and care improvement as the basis for payment. In November, CMS published the final rule for the Comprehensive Care for Joint Replacement (CJR) model (November 16, 2015), as well as a proposed rule that would revise the discharge planning conditions of participation (CoPs) for hospitals, including critical access hospitals.

Who’s Going Under the Bus? Federal Policy on Individual Responsibility for Corporate Wrongdoing: In a wake-up call to health care corporate officers and managers, Deputy Attorney General Sally Yates earlier this fall announced a new, tougher U.S. Department of Justice policy regarding individual responsibility for corporate wrongdoing, both civil and criminal. DOJ needs this new policy, she said, because it is so difficult to identify the person or group of people in a large company who knew they were doing something wrong and had the intent to be legally culpable.

Proposed CON and Reporting Rules in the Works at DHHS: The N.C. Department of Health and Human Services (the Department) has recently proposed changes to the rules governing health service facilities, including hospitals. The Department’s Healthcare Planning and Certificate of Need Section (the CON Section) has proposed eliminating several rules related to information required for CON applications, while the Medical Care Commission has proposed temporary rules changing certain reporting requirements for hospitals and ambulatory surgical facilities in response to recent legislation. Each of these developments is discussed below.

What They Mean for Phase 2 Audit Preparation and Compliance Planning: The Office of Civil Rights (OCR) recently announced plans to begin the next round of its HIPAA audit program in early 2016. In comments responding to two reports issued by the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services on September 29, 2015, OCR announced that it will begin Phase 2 of the HIPAA audits early next year. Consistent with prior descriptions of the Phase 2 audits, OCR stated in its recent response to OIG that the audits would include a combination of desk audits and on-site audits, will involve both covered entities and business associates, and will target specific common areas of noncompliance.